1
G. R. No. 197802, Nov. 11, 2015
ZUNECA PHARMACEUTICAL, AKRAM ARAIN
AND/OR VENUS ARAIN, M.D. DBA ZUNECA
PHARMACEUTICAL, Petitioners, v. NATRAPHA
RM, INC., Respondent.
Respondent is an all-Filipino pharmaceutical
company which manufactures and sells a
medicine bearing the generic name
"CITICOLINE," which is indicated for heart and
stroke patients. The said medicine is marketed by
respondent under its registered trademark
"ZYNAPSE," which respondent obtained from the
Intellectual Property Office (IPO) on September
24, 2007 under Certificate of Trademark
Registration No. 4-2007-005596. With its
registration, the trademark "ZYNAPSE" enjoys
protection for a term of 10 years from September
24, 2007.
Early 2001, petitioners have been selling a
medicine imported from Lahore, Pakistan bearing
the generic name "CARBAMAZEPINE," an anti-
convulsant indicated for epilepsy, under the
brand name "ZYNAPS," which trademark is
however not registered with the IPO. "ZYNAPS" is
pronounced exactly like "ZYNAPSE."
Respondent claimed that the drug
CARBAMAZEPINE has one documented serious
and disfiguring side-effect called "Stevens-
Johnson Syndrome," and that the sale of the
medicines "ZYNAPSE" and "ZYNAPS" in the same
drugstores will give rise to medicine switching.
Petitioners claimed that they had prior use of the
name "ZYNAPS" since year 2003, having been
issued by the BFAD a Certificate of Product
Registration (CPR) on April 15, 2003, which
allowed them to sell CARBAMAZEPINE under the
brand name "ZYNAPS."
Respondent filed a complaint against petitioners
for trademark infringement for violation of
Republic Act (R.A.) No. 8293, or the Intellectual
Property Code of the Philippines (IPC).
In their answer, petitioners argued that they
enjoyed prior use in good faith of the brand name
"ZYNAPS," having submitted their application for
CPR with the BFAD on October 2, 2001, with the
name "ZYNAPS" expressly indicated thereon. The
CPR was issued to them on April 15,
2003.Petitioners averred that under Section
159 of the IPC their right to use the said mark is
protected.
The Regional Trial Court (RTC) denied
respondent's application for a TRO, ruling that
even if respondent was able to first register its
mark "ZYNAPSE" with the IPO in 2007, it is
nevertheless defeated by the prior actual use by
petitioners of "ZYNAPS" in 2003.
In this Court's objective evaluation, neither party
is, at this point, entitled to any injunctive solace.
Plaintiff, while admittedly the holder of a
registered trademark under the IPC, may not
invoke ascendancy or superiority of its CTR
[certificate of trademark registration] over the
CPR [certificate of product registration of the
BFAD] of the defendants, as the latter certificate
is, in the Court's opinion, evidence of its "prior
use". Parenthetically, the plaintiff would have
been entitled to an injunction as against any or
all third persons in respect of its registered mark
under normal conditions, that is, in the event
wherein Section 159 would not be invoked by
such third person. Such is the case however in
this litigation. Section 159 of the IPC explicitly
curtails the registrant's rights by providing for
limitations on those rights as against a "prior
user" under Section 159.
CA issued a Resolution denying respondent's
application for TRO and/or preliminary injunction
for lack of merit. The CA found no compelling
reason to grant the application for TRO and/or
preliminary injunction because there was no
showing that respondent had a clear and existing
right that will be violated by petitioners.
Respondent moved for reconsideration but was
denied by the CA in its July 31, 2008 Resolution.
Issue:
Whether the CA may order a permanent
injunction in deciding a petition
for certiorari against the denial of an application
for a preliminary injunction issued by the RTC?
Held:
Rule 58 of the Rules of Court provides for both
preliminary and permanent injunction. Section 1,
Rule 58 provides for the definition of preliminary
injunction:
SECTION 1. Preliminary injunction defined;
classes. — A preliminary injunction is an order
granted at any stage of an action or
proceeding prior to the judgment or final
order, requiring a party or a court, agency
or a person to refrain from a particular act
or acts. It may also require the performance of a
particular act or acts, in which case it shall be
known as a preliminary mandatory injunction.
On the other hand, Section 9 of the same Rule
defines a permanent injunction in this wise:
SEC. 9. When final injunction granted. — If after
the trial of the action it appears that the
applicant is entitled to have the act or acts
complained of permanently enjoined, the court
shall grant a final injunction perpetually
restraining the party or person enjoined from the
commission or continuance of the act or acts or
confirming the preliminary mandatory injunction.
A writ of preliminary injunction is generally based
solely on initial and incomplete evidence. The
evidence submitted during the hearing on an
application for a writ of preliminary injunction is
not conclusive or complete for only a sampling is
needed to give the trial court an idea of the
justification for the preliminary injunction
pending the decision of the case on the
merits. As such, the findings of fact and opinion
 2

of a court when issuing the writ of preliminary BF Homes and PWCC asked for refund in the
injunction are interlocutory in nature and made amount ofP11,834,570.91.c. Accordingly,
even before the trial on the merits is commenced MERALCO disconnected electric supply to BF H
or terminated. omes and PWCCs’
16 waterpumps located in BF Homes in
By contrast a permanent injunction, based on Paranaque, Caloocan, and Quezon City, which
Section 9, Rule 58 of the Rules of Court, forms thus disrupted watersupply in those
part of the judgment on the merits and it can areasa. Meralco demanded from BF Homes
only be properly ordered only on final judgment. and PWCC the payment of electric billsamounting
A permanent injunction may thus be granted to P4,717,768.15b. BF Homes and PWCC then
after a trial or hearing on the merits of the case requested that such amount be applied against
and a decree granting or refusing an injunction theP11,834,570.91 worth of refund asked from
should not be entered until after a hearing on the Meralco. Denied.c. Again, 5 more water
merits where a verified answer containing denials pumps was were cut off power supply.
is filed or where no answer is required, or a rule Meralco threatened to cutmore power supplyd.
to show cause is equivalent to an answer. BF Homes and PWCC filed a case in RTC asking
for damages plus writ of preliminary
As such a preliminary injunction, like any injunctionand restraining ordera.
preliminary writ and any interlocutory order, In Meralco’s answer, it allege that the
cannot survive the main case of which it is an service contracts provides that
incident; because an ancillary writ of preliminary “The Company
injunction loses its force and effect after the reserves the right to discontinue service in case
decision in the main petition. the customer is in arrears in the payment
of bills”
This Court is being asked to determine whether and such right is sanctioned and approved by
the CA erred by issuing a permanent injunction in the rules and regulations of ERBb. As to the
a case which questioned the propriety of the refund, Meralco claims that the refund has to be
denial of an ancillary writ. But with the RTC's implemented in accordancewith the guidelines
December 2, 2011 Decision on the case for and schedule to be approved by the
"Injunction, Trademark Infringement, Damages ERCc. Meralco also allege that RTC has no
and Destruction," the issues raised in the instant jurisdiction over the subject matter
petition have been rendered moot and academic. ISSUES
We note that the case brought to the CA on a 1. W/N the remedy of injunction is proper2. W/N
petition for certiorari merely involved the RTC's the court has jurisdiction over the subject matter
denial of respondent's application for a writ of RULING & RATIO
preliminary injunction, a mere ancillary writ. a. Yes, the injunction is granted by
Since a decision on the merits has already been the Courta. The right of Meralco under the said
rendered and which includes in its disposition a service contract must succumb to
permanent injunction, the proper remedy is an the paramountsubstantial and constitutional
appeal from the decision in the main case. rights of the public to the usage and enjoyment
of waters intheir communityb. Such injunction
must be given in order to prevent social unrest in
the community forhaving been deprived of the
BF Homes v MeralcoG.R. No. 171624 | SCRA use and enjoyment of watersb. No, the Court has
| December 6, 2010 | Leonardo-De Castro, no jurisdiction over the case of refunda. In
J.Petition: determining which body has jurisdiction over
Petition for Review on Certiorari a case, the better policy is to considernot only
Petitioners: the status or relationship of the parties but also
BF Homes and Philippines Waterworks and the nature of the action that is thesubject of their
Construction Co. controversyb. In Meralco v ERB, the Court
Respondents: traced the legislative history of the
Manila Electric Company regulatory agencieswhich preceded the ERC to
determine the legislative intent as to its
DOCTRINE jurisdictionc. Accordingly, ERC has original
and exclusive jurisdiction over all cases
The doctrine of primary jurisdiction contestingrates, fees, fines, and penalties
Relevant Provision imposed by the ERC in the exercise of its powers,
FACTS functionsand responsibilitiesd. The doctrine
a. BF Homes and PWCC distributes water drawn of primary jurisdiction applies where the
from deep wells using pumps run administrative agency, as in thecase of ERC,
by electricitysupplied by MERALCO in BF Homes exercises its quasi-judicial and adjudicatory
subdivisions in Paraaque City, Las Pias City, functione. The cause of action originates from the
Caloocan City,and Quezon Cityb. In Republic v Meralco Refund Decision as it
Meralco, the SC ordered MERALCO to refund its involves theperceived right of the BF Homes and
customers, which shall becredited against the PWCC to compel the latter to set-off or apply
customers future consumption, the excess theirrefund to their present electric
average amount of P0.167 perkilowatt hour billf. Such right of refund however must comply
starting with the customers billing cycles with the approved schedule of ERCg. Hence,
beginning February 1998a. Due to this ruling,

jurisdiction lies with ERC. Since RTC has
no jurisdiction, it was also devoid ofany authority
to act on the application of BF Homes and PWCC
for the issuance of a writ ofpreliminary injunction
contained in the same Petition
DISPOSITION
WHEREFORE
, the instant Petition for Review is
DENIED
. The Decisiondated October 27, 2005 of the Court
of Appeals in CA-G.R. SP No. 82826 is
AFFIRMED with the
MODIFICATION
that the Regional Trial Court, Branch202 of Las
Pias City, is
ORDERED
to dismiss the Petition [With Prayer forthe
Issuance of Writ of Preliminary Injunction and for
the ImmediateIssuance of Restraining Order]
of BF Homes, Inc. and Philippine Waterworksand
Construction Corporation in Civil Case No. 03-
0151. Costs against BFHomes, Inc. and Philippine
Waterworks and Construction Corporation.
SO ORDERED
NORTHERN VS SPS. GARCIA
PERLAS-BERNABE, J.:
Assailed in this petition for review
on certiorari[1] are the Decision[2] dated January
19, 2012 and the Resolution [3] dated August 24,
2012 of the Court of Appeals (CA) in CA-G.R. SP
No. 97448, ordering the Regional Trial Court of
Quezon City, Branch 215 (RTC) to appoint a
commissioner to determine the value of the
attached properties of respondents Spouses
Dennis and Cherylin Garcia (respondents), and to
discharge any excessive attachment found
thereby.
The Facts
On September 23, 2005, petitioner Northern
Islands Co., Inc. (petitioner) filed
Complaint[4] with application for a writ of
preliminary attachment, before the RTC against
respondents, docketed as Civil Case No. Q-05-
53699 (Main Case), which was subsequently
amended[5] on October 25, 2005.[6] It alleged
that: (a) from March to July 2004, petitioner
caused the delivery to respondents of various
appliances in the aggregate amount of
P8,040,825.17;[7] (b) the goods were
transported, shipped, and delivered by Sulpicio
Lines, Inc., and were accepted in good order and
condition by respondents'
representatives;[8] (c) the parties agreed that
the goods delivered were payable within 120
days, and that the unpaid amounts would earn
interest at a rate of eighteen percent (18%) per
annum;[9] (d) however, the value of the goods
were not paid by respondents despite repeated
3
demands;[10] and (e) respondents fraudulently
asserted that petitioner had no proof that
they had indeed received the quantity of the
subject goods.[11]
In connection with the application for a writ of
preliminary attachment, petitioner posted a bond,
through Visayan Surety and Insurance
Corporation, in the amount of ?8,040,825.17. On
November 7, 2005, the RTC issued the writ
sought for.[12]
Instead of filing an answer, respondents filed on
November 11, 2001, an Urgent Motion for
Extension of Time to File Proper Pleading and
Motion for Discovery (Production and
Inspection)[13] (November 11, 2001 Motion),
asking the RTC to allow them to photocopy and
personally examine the original invoices, delivery
cargo receipts, and bills of lading attached to the
Amended Complaint, claiming that they could not
"come up with an intelligent answer" without
being presented with the originals of such
documents.[14]
Thereafter, or on January 11, 2006, respondents
filed a Motion to Discharge Excess
Attachment,[15] alleging that the attachment
previously ordered by the RTC exceeded by
P9,232,564.56 given that the estimated value of
the attached properties, including the garnished
bank accounts, as assessed by their appraiser,
Gaudioso W. Lapaz (Lapaz), amounted to
P17,273,409.73, while the attachment bond is
only in the amount of P8,040,825.17.[16]
In an Order[17] dated February 28, 2006, the RTC
denied the November 11, 2001 Motion, and,
instead, directed respondents to file their answer,
which the latter complied with through the filing
of their Answer Ad Cautelam Ex Abudante with
Compulsory Counterclaim[18]on April 3, 2006.
Despite this, respondents again filed a Motion for
Leave of Court to File Motion for Discovery
(Production and Inspection)[19] (Motion for
Discovery) on April 7, 2006.[20]
The RTC Ruling
a In an Order[21] dated June 21, 2006, the RTC,
among others, denied the Motion to Discharge
Excess Attachment, finding that the appraisal
made by Lapaz was not reflective of the true
valuation of the properties, adding too that the
bond posted by petitioner stands as sufficient
security for whatever damages respondents may
sustain by reason of the attachment.[22]
On the other hand, the RTC granted the Motion
for Discovery in accordance with Rule 27 of the
Rules of Court, despite petitioner's claim that it
did not have the originals of the documents being
sought.[23]
However, no production or inspection was
conducted on July 10, 2006 as the RTC directed
since respondents received the copy of the above

order only on July 11, 2006.[24]
On July 25, 2006, respondents filed a Motion for
Partial Reconsideration of the Order dated June
21, 2006, specifically assailing the denial of their
Motion to Discharge Excess Attachment. In this
relation, they prayed that the RTC refer to a
commissioner, pursuant to Rule 32 of the Rules
of Court, the factual determination of the total
aggregate amount of respondents' attached
properties so as to ascertain if the attachment
was excessive. Also, they prayed that the order
for production and inspection be modified and
that petitioner be ordered to produce the original
documents anew for their inspection and
copying. [25]
The foregoing motion was, however, denied by
the RTC in an Order[26] dated August 23, 2006 for
lack of merit. Thus, respondents elevated the
matter to the CA via petition for certiorari and
mandamus,[27] docketed as CA-G.R. SP No.
97448 (Certiorari Case).
In the interim, the RTC rendered a and the expiration of the time to appeal of
Decision[28] dated September 21, 2011 in the
Main Case. Essentially, it dismissed petitioner's
Amended Complaint due to the absence of any
evidence to prove that respondents had agreed
to the pricing of the subject goods.[29]
The RTC's September 21, 2011 Decision was
later appealed[30] by petitioner before the CA on
October 27, 2011. Finding that the Notice of
Appeal was seasonably filed, with the payment of
the appropriate docket fees, the RTC, in an
Order[31] dated January 25, 2012, ordered the
elevation of the entire records of the Main Case
to the CA. The appeal was then raffled to the
CA's Eighth Division, and docketed as CA-G.R.
CV No. 98237. On the other hand, records do
not show that respondents filed any appeal.[32]
The CA Ruling in the Certiorari Case
Meanwhile, the CA, in a Decision [33] dated
January 19, 2012, partly granted
the certiorari petition of respondents, ordering
the RTC to appoint a commissioner as provided
under Rule 32 of the Rules of Court as well as the
subsequent discharge of any excess attachment if
so found therein, and, on the other hand,
denying respondents' Motion for Discovery.[34]
It held that: (a) on the issue of attachment, trial
by commissioners under Rule 32 of the Rules of
Court was proper so that the parties may finally
settle their conflicting valuations; [35] and (b) on
the matter of discovery, petitioner could not be
compelled to produce the originals sought by
respondents for inspection since they were not in
the former's possession.[36]
Aggrieved, petitioner filed a Motion for Partial
Reconsideration[37] on February 13, 2012 but
was, however, denied in a Resolution [38]dated
August 24, 2012, hence, the present petition.
4
The Issues Before the Court
The issues presented for the Court's resolution
are: (a) whether the RTC had lost jurisdiction
over the matter of the preliminary attachment
after petitioner appealed the decision in the Main
Case, and thereafter ordered the transmittal of
the records to the CA; and (b) whether the CA
erred in ordering the appointment of a
commissioner and the subsequent discharge of
any excess attachment found by said
commissioner.
The Court's Ruling
The petition is meritorious.
Section 9, Rule 41 of the Rules of Court provides
that in appeals by notice of appeal, the court
loses jurisdiction over the case upon the
perfection of the appeals filed in due time
the other parties.
In this case, petitioner had duly perfected its
appeal of the RTC's September 21, 2011 Decision
resolving the Main Case through the timely filing
of its Notice of Appeal dated October 27, 2011,
together with the payment of the appropriate
docket fees. The RTC, in an Order[39]dated
January 25, 2012, had actually confirmed this
fact, and thereby ordered the elevation of the
entire records to the CA. Meanwhile, records do
not show that respondents filed any appeal,
resulting in the lapse of its own period to appeal
therefrom. Thus, based on Section 9, Rule 41, it
cannot be seriously doubted that the RTC had
already lost jurisdiction over the Main Case.
With the RTC's loss of jurisdiction over the Main
Case necessarily comes its loss of jurisdiction
over all matters merely ancillary thereto. Thus,
the propriety of conducting a trial by
commissioners in order to determine the
excessiveness of the subject preliminary
attachment, being a mere ancillary matter to the
Main Case, is now mooted by its supervening
appeal in CA-G.R. CV No. 98237.
Note that in Sps. Olib v. Judge Pastoral,[40] the
Court, in view of the nature of a preliminary
attachment, definitively ruled that the
attachment itself cannot be the subject of a
separate action independent of the principal
action because the attachment was only an
incident of such action, viz.:
Attachment is defined as a provisional remedy by
which the property of an adverse party is taken
into legal custody, either at the commencement
of an action or at any time thereafter, as a
security for the satisfaction of any judgment that
may be recovered by the plaintiff or any proper
party.

It is an auxiliary remedy and cannot have an
independent existence apart from the main suit
or claim instituted by the plaintiff against the
defendant. Being merely ancillary to a
principal proceeding, the attachment must
fail if the suit itself cannot be maintained as
the purpose of the writ can no longer be
justified.
The consequence is that where the main action is
appealed, the attachment which may have been
issued as an incident of that action, is also
considered appealed and so also removed from
the jurisdiction of the court a quo. The
attachment itself cannot be the subject of a
separate action independent of the principal
action because the attachment was only an
incident of such action.[41] (Emphases
supplied)
That being said, it is now unnecessary to discuss
the other issues raised herein. In fine, the
petition is granted and the assailed CA rulings are
set aside.
WHEREFORE, the petition is GRANTED. The
Decision dated January 19, 2012 and the
Resolution dated August 24, 2012 of the Court of
Appeals in CA-G.R. SP No. 97448 are hereby SET
ASIDE.
SO ORDERED.
Bernardo Valdevieso vs Candelario
Damalerio and Aurea C. Damalerio
February 17, 2005
Facts:
On 05 December 1995, Bernardo Valdevieso
(petitioner) bought from spouses Lorenzo and
Elenita Uy a parcel of land. The deed of sale was
not registered, nor was the title of the land
transferred to petitioner. It came to pass that on
19 April 1996, spouses Candelario and Aurea
Damalerio (respondents) filed with the Regional
Trial Court (RTC) a complaint for a sum of money
against spouses Lorenzo and Elenita Uy with
application for the issuance of a Writ of
Preliminary Attachment. On 23 April 1996, the
trial court issued a Writ of Preliminary
Attachment by virtue of which the property, then
still in the name of Lorenzo Uy but which had
already been sold to petitioner, was levied. The
levy was duly recorded in the Register of Deeds.
On 06 June 1996, TCT No. T-30586 in the name
of Lorenzo Uy was cancelled and, in lieu thereof,
TCT No. T-74439 was issued in the name of
petitioner. This new TCT carried with it the
attachment in favor of respondents. On 14
August 1996, petitioner filed a third-party claim
to discharge or annul the attachment levied on
5
the property covered by TCT No. T-74439 on the
ground that the said property belongs to him and
no longer to Lorenzo and Elenita Uy. The trial
court ruled for the petitioner. Respondents
sought reconsideration thereof which was denied
by the trial court. From the unfavorable
resolution of the trial court in the third-party
claim, respondents appealed to the Court of
Appeals. The appellate court reversed the
resolution. Petitioner moved for reconsideration
but this was denied by the Court of Appeals.
Hence, this Petition for Review on Certiorari.
Issue:
Whether or not a registered writ of attachment
on the land is a superior lien over that of an
earlier unregistered deed of sale?
Ruling:
We agree with the respondents.
The law applicable to the facts of this case is
Section 51 of P.D. No. 1529. Said Section
provides:
Sec. 51. Conveyance and other dealings by
registered owner. - An owner of registered land
may convey, mortgage, lease, charge, or
otherwise deal with the same in accordance with
existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments
as are sufficient in law. But no deed, mortgage,
lease, or other voluntary instrument, except a
will purporting to convey or affect registered
land, shall take effect as a conveyance or bind
the land, but shall operate only as a contract
between the parties and as evidence of authority
to the Register of Deeds to make registration.
The act of registration shall be the operative act
to convey or affect the land insofar as third
persons are concerned, and in all cases under
this Decree, the registration shall be made in the
office of the Register of Deeds for the province or
city where the land lies.
It should also be observed that, at the time of
the attachment of the property on 23 April 1996,
the spouses Uy were still the registered owners
of said property. Under the cited law, the
execution of the deed of sale in favor of
petitioner was not enough as a succeeding step

had to be taken, which was the registration of
the sale from the spouses Uy to him. Insofar as
third persons are concerned, what validly
transfers or conveys a persons interest in real
property is the registration of the deed. Thus,
when petitioner bought the property on 05
December 1995, it was, at that point, no more
than a private transaction between him and the
spouses Uy. It needed to be registered before it
could bind third parties, including respondents.
When the registration finally took place on 06
June 1996, it was already too late because, by
then, the levy in favor of respondents, pursuant
to the preliminary attachment ordered by the
General Santos City RTC, had already been
annotated on the title.
The settled rule is that levy on attachment, duly
registered, takes preference over a prior
unregistered sale. This result is a necessary
consequence of the fact that the property
involved was duly covered by the Torrens system
which works under the fundamental principle that
registration is the operative act which gives
validity to the transfer or creates a lien upon the
land.
The preference created by the levy on
attachment is not diminished even by the
subsequent registration of the prior sale. This is
so because an attachment is a proceeding in rem.
It is against the particular property, enforceable
against the whole world. The attaching creditor
acquires a specific lien on the attached property
which nothing can subsequently destroy except
the very dissolution of the attachment or levy
itself. Such a proceeding, in effect, means that
the property attached is an indebted thing and a
virtual condemnation of it to pay the owners
debt. The lien continues until the debt is paid, or
sale is had under execution issued on the
judgment, or until the judgment is satisfied, or
the attachment discharged or vacated in some
manner provided by law.
Thus, in the registry, the attachment in favor of
respondents appeared in the nature of a real lien
when petitioner had his purchase recorded. The
effect of the notation of said lien was to subject
and subordinate the right of petitioner, as
purchaser, to the lien. Petitioner acquired
ownership of the land only from the date of the
recording of his title in the register, and the right
of ownership which he inscribed was not absolute
but a limited right, subject to a prior registered
lien of respondents, a right which is preferred
and superior to that of petitioner.
6
The appealed Decision of the Court of Appeals
and its Resolution are hereby affirmed.
K.O. GLASS CONSTRUCTIONS VS. VALENZUELA
202 Phil. 141
CONCEPCION, JR., J.:
Petition for certiorari to annul and set aside the writ
of preliminary attachment issued by the respondent
Judge in Civil Case No. 5902-P of the Court of First
Instance of Rizal, entitled: "Antonio D. Pinzon,
plaintiff, versus K.O. Glass Construction Co., Inc.,
and Kenneth O. Glass, defendants," and for the
release of the amount of P37,190.00, which had
been deposited with the Clerk of Court, to the
petitioner.
On October 6, 1977, an action was instituted in the
Court of First Instance of Rizal by Antonio D. Pinzon
to recover from Kenneth O. Glass the sum of
P37,190.00, alleged to be the agreed rentals of his
truck, as well as the value of spare parts which
have not been returned to him upon termination of
the lease. In his verified complaint, the plaintiff
asked for an attachment against the property of
the defendant consisting of collectibles and
payables with the Philippine Geothermal, Inc., on
the grounds that the defendant is a foreigner; that
he has a sufficient cause of action against the said
defendant; and that there is no sufficient security
for his claim against the defendant in the event a
judgment is rendered in his favor.[1]
Finding the petition to be sufficient in form and
substance, the respondent Judge ordered the
issuance of a writ of attachment against the
properties of the defendant upon the plaintiff's filing
of a bond in the amount of P37,190.00.[2]
Thereupon, on November 22, 1977, the defendant
Kenneth O. Glass moved to quash the writ of
attachment on the grounds that there is no cause
of action against him since the transactions or
claims of the plaintiff were entered into by and
between the plaintiff and the K.O. Glass
Construction Co., Inc., a corporation duly
organized and existing under Philippine laws; that
there is no ground for the issuance of the writ of
preliminary attachment as defendant Kenneth O.
Glass never intended to leave the Philippines, and
even if he does, plaintiff can not be prejudiced
thereby because his claims are against a
corporation which has sufficient funds and property
to satisfy his claim; and that the money being
garnished belongs to the K.O. Glass Corporation
Co., Inc. and not to defendant Kenneth O. Glass.[3]
By reason thereof, Pinzon amended his complaint
to include K.O. Glass Construction Co., Inc. as co-
defendant of Kenneth O. Glass.[4]
On January 26, 1978, the defendants therein filed a
supplementary motion to discharge and/or dissolve
the writ of preliminary attachment upon the ground
that the affidavit filed in support of the motion for
preliminary attachment was not sufficient or

wanting in law for the reasons that: (1) the affidavit
did not state that the amount of plaintiff's claim was
above all legal set-offs or counterclaims, as
required by Sec. 3, Rule 57 of the Revised Rules of
Court; (2) the affidavit did not state that there is no
other sufficient security for the claim sought to be
recovered by the action as also required by said
Sec. 3; and (3) the affidavit did not specify any of
the grounds enumerated in Sec. 1 of Rule 57,[5] but,
the respondent Judge denied the motion and
ordered the Philippine Geothermal, Inc. to deliver
and deposit with the Clerk of Court the amount of
P37,190.00 immediately upon receipt of the order
which amount shall remain so deposited to await
the judgment to be rendered in the case.[6]
On June 19, 1978, the defendants therein filed a
bond in the amount of P37,190.00 and asked the
court for the release of the same amount deposited
with the Clerk of Court,[7] but, the respondent
Judge did not order the release of the money
deposited.[8]
Hence, the present recourse. As prayed for, the
Court issued a temporary restraining order,
restraining the respondent Judge from further
proceeding with the trial of the case.[9]
We find merit in the petition. The respondent Judge
gravely abused his discretion in issuing the writ of
preliminary attachment and in not ordering the
release of the money which had been deposited
with the Clerk of Court for the following reasons:
First, there was no ground for the issuance of the
writ of preliminary attachment. Section 1, Rule 57 of
the Revised Rules of Court, which enumerates the
grounds for the issuance of a writ of preliminary
attachment, reads, as follows:
"Sec. 1. Grounds upon which attachment may
issue. - A plaintiff or any proper party may, at the
commencement of the action or at any time
thereafter, have the property of the adverse party
attached as security for the satisfaction of any
judgment that may be recovered in the following
cases:
"(a) In an action for the recovery of money or
damages on a cause of action arising from
contract, express or implied, against a party who is
about to depart from the Philippines with intent to
defraud his creditor;
"(b) In an action for money or property embezzled
or fraudulently misapplied or converted to his own
use by a public officer, or an officer of a
corporation, or an attorney, factor, broker, agent,
or clerk, in the course of his employment as such, or
by any other person in a fiduciary capacity, or for a
willful violation of duty;
"(c) In an action to recover the possession of
personal property unjustly detained, when the
property, or any part thereof, has been concealed,
removed, or disposed of to prevent its being found
or taken by the applicant or an officer;
"(d) In an action against the party who has been
guilty of a fraud in contracting the debt or incurring
the obligation upon which the action is brought, or
7
in concealing or disposing of the property for the
taking, detention or conversion of which the action
is brought;
"(e) In an action against a party who has removed
or disposed of his property, or is about to do so, with
intent to defraud his creditors;
"(f) In an action against a party who resides out of
the Philippines, or on whom summons may be
served by publication."
In ordering the issuance of the controversial writ of
preliminary attachment, the respondent Judge said
and We quote:
"The plaintiff filed a complaint for a sum of money
with prayer for Writ of Preliminary Attachment
dated September 14, 1977, alleging that the
defendant who is a foreigner may, at any time,
depart from the Philippines with intent to defraud
his creditors including the plaintiff herein; that there
is no sufficient security for the claim sought to be
enforced by this action; that the amount due the
plaintiff is as much as the sum for which an order of
attachment is sought to be granted; and that
defendant has sufficient leviable assets in the
Philippines consisting of collectibles and payables
due from Philippine Geothermal, Inc., which may
be disposed of at any time, by defendant if no Writ
of Preliminary Attachment may be issued. Finding
said motion and petition to be sufficient in form and
substance."[10]
Pinzon, however, did not allege that the defendant
Kenneth O. Glass "is a foreigner (who) may, at any
time, depart from the Philippines with intent to
defraud his creditors including the plaintiff." He
merely stated that the defendant Kenneth O. Glass
is a foreigner. The pertinent portion of the complaint
reads, as follows:
"15. Plaintiff hereby avers under oath that
defendant is a foreigner and that said defendant
has a valid and just obligation to plaintiff in the total
sum of P32,290.00 arising out from his failure to pay
(i) service charges for the hauling of construction
materials; (ii) rentals for the lease of plaintiff's Isuzu
Cargo truck, and (iii) total cost of the
missing/destroyed spare parts of said leased unit;
hence, a sufficient cause of action exists against
said defendant. Plaintiff also avers under oath that
there is no sufficient security for his claim against the
defendant in the event a judgment be rendered in
favor of the plaintiff. However, defendant has
sufficient assets in the Philippines in the form of
collectibles and payables due from the Philippine
Geothermal, Inc. with office address at Citibank
Center, Paseo de Roxas, Makati, Metro Manila, but
which properties, if not timely attached, may be
disposed of by defendant and would render
ineffectual the reliefs prayed for by plaintiff in this
Complaint."[11]
In his Amended Complaint, Pinzon alleged the
following:
"15. Plaintiff hereby avers under oath that
defendant GLASS is an American citizen who
controls most, if not all, the affairs of defendant
CORPORATION. Defendants CORPORATION and

GLASS have a valid and just obligation to plaintiff in
the total sum of P32,290.00 arising out for their
failure to pay (i) service charges for the hauling of
construction materials, (ii) rentals for the lease of
plaintiff's Isuzu Cargo truck, and (iii) total cost of the
missing/destroyed spare parts of said leased unit;
hence, a sufficient cause of action exist against
said defendants. Plaintiff also avers under oath that
there is no sufficient security for his claim against the
defendants in the event a judgment be rendered in
favor of the plaintiff. However, defendant
CORPORATION has sufficient assets in the
Philippines in the form of collectibles and payables
due from the Philippine Geothermal, Inc. with office
address at Citibank Center, Paseo de Roxas,
Makati, Metro Manila, but which properties, if not
timely attached, may be disposed of by
defendants and would render ineffectual the reliefs
prayed for by plaintiff in this Complaint."[12]
There being no showing, much less an allegation,
that the defendants are about to depart from the
Philippines with intent to defraud their creditor, or
that they are nonresident aliens, the attachment of
their properties is not justified.
Second, the affidavit submitted by Pinzon does not
comply with the Rules. Under the Rules, an affidavit
for attachment must state that (a) a sufficient
cause of action exists, (b) the case is one of those
mentioned in Section 1(a) of Rule 57; (c) there is no
other sufficient security for the claim sought to be
enforced by the action, and (d) the amount due to
the applicant for attachment or the value of the
property the possession of which he is entitled to
recover, is as much as the sum for which the order is
granted above all legal counterclaims. Section 3,
Rule 57 of the Revised Rules of Court reads, as
follows:
"Section 3. Affidavit and bond required. - An order
of attachment shall be granted only when it is
made to appear by the affidavit of the applicant,
or of some person who personally knows the facts,
that a sufficient cause of action exists; that the case
is one of those mentioned in Section 1 hereof; that
there is no other sufficient security for the claim
sought to be enforced by the action, and that the
amount due to the applicant, or the value of the
property the possession of which he is entitled to
recover, is as much as the sum for which the order is
granted above all legal counterclaims. The
affidavit, and the bond required by the next
succeeding section, must be duly filed with the
clerk or judge of the court before the order issues."
In his affidavit, Pinzon stated the following:
"I, ANTONIO D. PINZON, Filipino, of legal age,
married and with residence and postal address at
1422 A. Mabini Street, Ermita, Manila, subscribing
under oath, depose and states that"
"1. On October 6, 1977, I filed with the Court of First
Instance of Rizal, Pasay City Branch, a case against
Kenneth O. Glass entitled 'ANTONIO D. PINZON vs.
KENNETH O. GLASS', docketed as Civil Case No.
5902-P;
8
"2. My Complaint against Kenneth O. Glass is based
on several causes of action, namely:
"(i) On February 15, 1977, we mutually agreed that I
undertake to haul his construction materials from
Manila to his construction project in Bulalo, Bay,
Laguna and vice-versa, for a consideration of
P50.00 per hour;
"(ii) Also, on June 18, 1977, we entered into a
separate agreement whereby my Isuzu cargo truck
will be leased to him for a consideration of
P4,000.00 a month payable on the 15th day of
each month;
"(iii) On September 7, 1977, after making use of my
Isuzu truck, he surrendered the same without paying
the monthly rentals for the leased Isuzu truck and
the peso equivalent of the spare parts that were
either destroyed or misappropriated by him;
"3. As of today, October 11, 1977, Mr. Kenneth O.
Glass still owes me the total sum of P32,290.00
representing his obligation arising from the hauling
of his construction materials, monthly rentals for the
lease Isuzu truck and the peso equivalent of the
spare parts that were either destroyed or
misappropriated by him;
"4. I am executing this Affidavit to attest to the
truthfulness of the foregoing and in compliance
with the provisions of Rule 57 of the Revised Rules of
Court."[13]
While Pinzon may have stated in his affidavit that a
sufficient cause of action exists against the
defendant Kenneth O. Glass, he did not state
therein that "the case is one of those mentioned in
Section 1 hereof; that there is no other sufficient
security for the claim sought to be enforced by the
action; and that the amount due to the applicant is
as much as the sum for which the order granted
above all legal counterclaims." It has been held
that the failure to allege in the affidavit the
requisites prescribed for the issuance of a writ of
preliminary attachment, renders the writ of
preliminary attachment issued against the property
of the defendant fatally defective, and the judge
issuing it is deemed to have acted in excess of his
jurisdiction.[14]
Finally, it appears that the petitioner has filed a
counter-bond in the amount of P37,190.00 to
answer for any judgment that may be rendered
against the defendant. Upon receipt of the
counter-bond, the respondent Judge should have
discharged the attachment pursuant to Section 12,
Rule 57 of the Revised Rules of Court which reads,
as follows:
"Section 12. Discharge of attachment upon giving
counterbond. - At any time after an order of
attachment has been granted, the party whose
property has been attached, or the person
appearing on his behalf, may upon reasonable
notice to the applicant, apply to the judge who
granted the order, or to the judge of the court in
which the action is pending, for an order
discharging the attachment wholly or in part on the
security given. The judge shall, after hearing, order
the discharge of the attachment if a cash deposit is
 9

made, or a counterbond executed to the granted by petitioner to respondent during the

attaching creditor is filed, on behalf of the adverse months of February and April 1997.
party, with the clerk or judge of the court where the
application is made, in an amount equal to the
value of the property attached as determined by
Petitioner alleged that (1) respondent fraudulently
the judge, to secure the payment of any judgment
withdrew his unassigned deposits notwithstanding
that the attaching creditor may recover in the
his verbal promise to PCIB Assistant Vice President
action. Upon the filing of such counter-bond, copy
Corazon B. Nepomuceno not to withdraw the same
thereof shall forthwith be served on the attaching
prior to their assignment as security for the loan;
creditor or his lawyer. Upon the discharge of an
and (2) that respondent is not a resident of the
attachment in accordance with the provisions of
Philippines.
this section the property attached, or the proceeds
of any sale thereof, shall be delivered to the party
making the deposit or giving the counter-bond, or
the person appearing on his behalf, the deposit or RTC - granted the application and issued the writ ex
counter-bond aforesaid standing in the place of parte.
the property so released. Should such counter-
bond for any reason be found to be, or become,
insufficient, and the party furnishing the same fail to The bank deposits of respondent with Rizal
file an additional counter-bond, the attaching Commercial Banking Corporation (RCBC) were
creditor may apply for a new order of attachment." garnished. The respondent, filed a manifestation
The filing of the counter-bond will serve the purpose informing the court that he is voluntarily submitting
of preserving the defendant's property and at the to its jurisdiction.
same time give the plaintiff security for any
judgment that may be obtained against the
defendant.[15] Subsequently, respondent filed a motion to
quashthe writ contending that the withdrawal of his
WHEREFORE, the petition is GRANTED and the writ
unassigned deposits was not fraudulent as it was
prayed for is issued. The orders issued by the re-
approved by petitioner. He also alleged that
spondent Judge on October 11, 1977, January 26,
petitioner knew that he maintains a permanent
1978, and February 3, 1978 in Civil Case No. 5902-P
residence at Calle Victoria, Ciudad Regina,
of the Court of First Instance of Rizal, insofar as they
Batasan Hills, Quezon City, and an office address in
relate to the issuance of the writ of preliminary
Makati City at the Law Firm Romulo Mabanta
attachment, should be, as they are hereby
Buenaventura Sayoc & De los Angeles, where he is
ANNULLED and SET ASIDE and the respondents are
a partner. In both addresses, petitioner regularly
hereby ordered to forthwith release the garnished
communicated with him through its representatives.
amount of P137,190.00 to the petitioner. The
Respondent added that he is the managing
temporary restraining order, heretofore issued, is
partner of the Hong Kong branch of said Law Firm;
hereby lifted and set aside. Costs against the
that his stay in Hong Kong is only temporary; and
private respondent Antonio D. Pinzon.
that he frequently travels back to the Philippines.
SO ORDERED.

TOPIC: SUMMONS
PHILIPPINE COMMERCIAL INTERNATIONAL BANK vs
JOSEPH ANTHONY M. ALEJANDRO
FACTS:
Petitioner filed against respondent a complaint for
sum of money with prayer for the issuance of a writ
of preliminary attachment. Said complaint alleged
that respondent, a resident of Hong Kong,
executed in favor of petitioner a promissory note
obligating himself to pay P249,828,588.90 plus
interest. In view of the fluctuations in the foreign
exchange rates which resulted in the insufficiency
of the deposits assigned by respondent as security
for the loan, petitioner requested the latter to put
up additional security for the loan. Respondent,
however, sought a reconsideration of said request
pointing out petitioners alleged mishandling of his
account due to its failure to carry out his instruction
to close his account as early as April 1997, when the
prevailing rate of exchange of the US Dollar to
Japanese yen was US$1.00:JPY127.50. It appears
that the amount of P249,828,588.90 was the
consolidated amount of a series of yen loans
RTC issued an order quashing the writ and holding
that the withdrawal of respondents unassigned
deposits was not intended to defraud petitioner. It
also found that the representatives of petitioner
personally transacted with respondent through his
home address in Quezon City and/or his office in
Makati City. It thus concluded that petitioner
misrepresented and suppressed the facts regarding
respondents residence considering that it has
personal and official knowledge that for purposes
of service of summons, respondents residence and
office addresses are located in the Philippines.
CA - dismissed the petition for failure to prove that
the trial court abused its discretion in issuing the
aforesaid order.
SC - the case was dismissed for late filing in a
minute resolution (G.R. No. 140605) dated January
19, 2000. Petitioner filed a motion for
reconsideration but was likewise denied with finality
on March 6, 2000.

Respondent filed a claim for damages in the
amount of P25 Million on the attachment bond on
account of the wrongful garnishment of his
deposits.
RTC - awarded damages to respondent in the
amount of P25 Million without specifying the basis
thereof.
CA - affirmed the findings of the trial court. It held
that in claiming that respondent was not a resident
of the Philippines, petitioner cannot be said to have
been in good faith considering that its knowledge
of respondents Philippine residence and office
address goes into the very issue of the trial courts
jurisdiction which would have been defective had
respondent not voluntarily appeared before it.
ISSUE:
Whether petitioner bank is liable for damages for
the improper issuance of the writ of attachment
against respondent?
RULING:
No. Section 16, Rule 14 of the Rules of Court reads:
Sec. 16. Residents temporarily out of the Philippines.
When an action is commenced against a
defendant who ordinarily resides within the
Philippines, but who is temporarily out of it, service
may, by leave of court, be also effected out of the
Philippines, as under the preceding section.
In actions in personam, such as the instant case for
collection of sum of money, summons must be
served by personal or substituted service, otherwise
the court will not acquire jurisdiction over the
defendant. In case the defendant does not reside
and is not found in the Philippines (and hence
personal and substituted service cannot be
effected), the remedy of the plaintiff in order for the
court to acquire jurisdiction to try the case is to
convert the action into a proceeding in rem or
quasi in rem by attaching the property of the
defendant. Thus, in order to acquire jurisdiction in
actions in personam where defendant resides out
of and is not found in the Philippines, it becomes a
matter of course for the court to convert the action
into a proceeding in rem or quasi in rem by
attaching the defendants property. The service of
summons in this case (which may be by publication
coupled with the sending by registered mail of the
copy of the summons and the court order to the
last known address of the defendant), is no longer
10
for the purpose of acquiring jurisdiction but for
compliance with the requirements of due process.
However, where the defendant is a resident who is
temporarily out of the Philippines, attachment of
his/her property in an action in personam, is not
always necessary in order for the court to acquire
jurisdiction to hear the case.
Davao Light v. Court of Appeals
Facts
The Davao Light and Power Co., Inc. ("Davao
Light") filed a collection suit against Queensland
Hotel ("Queensland") and Teodorico Adarna
("Adarna") with an ex parte application for a writ of
preliminary attachment. On 3 May 1989, the trial
court issued an Order of Attachment, and the
corresponding Writ of Attachment on 11 May 1989.
On 12 May 1989, the summons, a copy of the
complaint, and the writ of attachment was served
upon Queensland and Adarna. Queensland and
Adarna filed a motion to discharge the attachment
on the ground that at the time the Order of
Attachment and Writ of Attachment were issued,
the trial court has yet to acquire jurisdiction over the
cause of action and over the persons of the
defendants.
Issue
Whether or not the writ of preliminary attachment
was validly issued.
Held
Yes. A writ of preliminary attachment may be issued
before the court acquires jurisdiction over the
person of the defendant.
Ratio Decidendi
The court may validly issue a writ of preliminary
injunction prior to the acquisition of jurisdiction over
the person of the defendant. There is an
appreciable period of time between the
commencement of the action (takes place upon
the filing of an initiatory pleading) and the service
of summons to the defendant. In the meanwhile,
there are a number of actions which the plaintiff or
the court may validly take, including the
application for and grant of the provisional remedy
of preliminary attachment. There is nothing in the
law which prohibits the court from granting the
remedy prior to the acquisition of jurisdiction over
the person of the defendant. In fact, Rule 57 of the
Rules of Court allows the granting of a writ of
preliminary injunction at the commencement of the
suit. In the cases of Toledo v. Burgos and Filinvest
Credit Corporation v. Relova, it was held that
notice and hearing are not prerequisites to the
issuance of a writ of preliminary attachment.
Further, in the case of Mindanao Savings & Loan
Association, Inc. v. Court of Appeals, it was ruled
that giving notice to the defendant would defeat
the purpose of the remedy by affording him or her
the opportunity to dispose of his properties before
the writ can be issued.
A preliminary attachment may be discharged with
the same ease as obtaining it. In any case, the
ease of availing the provisional remedy of
 11

preliminary attachment is matched by the ease

with which it can be remedied by either the posting
of a counterbond, or by a showing of its improper
or irregular issuance. The second means of
defeating a preliminary attachement, however,
may not be availed of if the writ was issued upon a
ground which is at the same time the applicant's
cause of action.
Preliminary attachment not binding until jurisdiction
over the person of the defendant is acquired. The
writ of preliminary attachment, however, even
though validly issued, is not binding upon the
defendant until jurisdiction over his person is first
acquired.